The Gamechanger: AOL Acquire Bebo In $850m Cash Deal

BeboOne of my former employers have announced that they’ve acquired Bebo
, currently ranked as the third largest social network in the US, behind MySpace and Facebook, and likely the widest used social network within Ireland. The deal sees AOL purchase Bebo in a US$850m cash deal, a price significantly higher than that paid for Intermix Media (MySpace) back at the end of 2005.

Of course, add two years worth of growth throughout the US and Europe, an opening up of the Bebo platform to accept third party applications and the price is likely to go up.

If AOL were looking for an “in” to the social networking arena, they’ve certainly got it now. The deal is expected to close some time in April, opening up a potential 40 million users to further AOL services (providing of course they’re not existing users).

I think it’s a great purchase for AOL and costs considered, it looks they’ve got themselves a decent price as well. Estimates on the sale of Bebo in the past 12 months have exceeded the US$1bn mark, TechCrunch reporting in February that Bebo may go for anywhere between US$1bn and US$1.5bn to Google while Yahoo was also rumoured to be looking into acquiring Bebo last summer.

From the announcement today, AOL chairman Randy Falco says

this deal is a “gamechanger” and will help power our strategic priorities across the board. Bebo is the best social media asset out there and has the most engaged audience and has seen great growth since its launch 3 years ago. We will be a social media powerhouse. 80 million unduplicated visitors when you count AIM and Bebo. Bebo will be connected to the largest distributed web audience and will circulate traffic from our sites to Bebo and the reverse and have the scale to grow Bebo worldwide. Joanna has impressed me with her vision for the new Web and better ways to connect and develop long-term relationship

Of course, the future of Yahoo itself has to be yet confirmed. There’s rumour today that Microsoft are set to announce their purchase of Yahoo at a 3pm press conference.

When all is said and done, congratulations to AOL on the deal, but does this mean I go back to using my ICQ account?

Update: Centernetworks has a live call with AOL (notes) here.

  • http://darraghdoyle.blogspot.com darragh

    Wow. wow oh wow. I’m stunned.

    Is that the end for bebo then? It will get a lot more advertising heavy, that’s for sure!

  • http://www.kenmc.com Ken McGuire

    I don’t think it’s the end of Bebo at all. They’re (AOL) talking about “high engagement” of the market that Bebo has built up, quite possible it will be done through more direct advertisement. It will be intersting to see what happens over the coming month as more details emerge.

  • http://blog.johnnypez.com John

    Yeah I think it’s a good move for AOL. I don’t think they will pack Bebo with advertising, there is plenty to be gained from Bebo’s current setup with an extra couple of million AOL users thrown into the mix.